Microsoft Project Server / Software as a Service / ROI / Benefits

By: Collin Quiring

Why go with Software as a Service (SaaS) for Project Server?  There are numerous reasons but here is a partial list of some of the items to think about, concentrating on the fact that SaaS for Microsoft Project Server is cost effective and allows for faster Return on Investment (ROI). 

 

Numerous factors affect the overall calculations for ROI and for the Total Cost of Ownership (TCO) of Microsoft Project Server; including, but not limited to:

 

·         Hardware cost

·         Software cost

·         Licensing fees

·         Installation administration

·         Procurement administration

·         Software upgrade cycles

·         Hardware upgrade cycles

·         Software administration

·         Hardware administration

·         Maintenance training of employees

·         Employee continuance issues

·         Management to coordinate and track support

·         Help Desk or other support functions

·         Data storage cost

·         Dedicated or consumed employee salaries

·         Multiple location coordination (systems and personnel)

·         Administration learning curves

·         IT accounting issues – depreciation, budget allocation

·         Flexibility to easily and quickly expand footprint

 

In a recent study by InformationWeek titled “Software as a Service Study” when asked what the biggest challenges with on-premise business applications were – 57% responded that the cost of IT staff resources required to support/manage were the largest issue.  Following that were the cost of upgrades and the maintenance costs.

 

For a tool like Microsoft Project Server, it doesn’t make sense to add headcount to maintain the server.  However, it also can’t be ignored.  This means that the training for and maintenance of the Project Server and its unique challenges are often put on a full-time employee who is most likely already at full capacity.  This tends to result in the “new” work of maintaining the Project Server becoming a secondary and lower priority task and often results in a less than optimized technical environment.  That is another great reason to go with SaaS – the dedication of the people maintaining the technical environment.

 

Other factors to consider are the size and procedures of the organization.  There are studies that try to predict the best company size where SaaS fits best.  However, I think that while SaaS works very well for smaller companies due to the inability to have internal resources do all the required work I think that the organization’s setup and methods affect the need for SaaS even more.  For an organization looking to maximize ROI and minimize internal ongoing costs, the SaaS model allows for a fast ROI and the ability to concentrate internal resources on existing technologies or other new projects.

 

While exact dollar figures are always specific to an organization’s environment such as user cost rates, licensing agreements, hardware and software purchasing agreements and numerous other variables, here are some generic ROI numbers based on retail market pricing.  This is an attempt to compare the ROI of SaaS and internal implementation of Project Server.

 

·         These estimates based on 100 users, 10 Project Managers, ·         They are based on new purchases of hardware and software
·         Licensing can be purchased by a company or leased from the SaaS provider, this assumes leasing (the more expensive option)
·         Estimates are also based on dedicated Project and SQL servers (which is the more expensive  method of using SaaS) ·         The more expensive SaaS options have been used to demonstrate that the ROI on SaaS is greater even in a non-optimal situation ·         The ROI would be even greater in an environment that already had software licensing agreements in place and would be greater for using non-dedicated SaaS servers ·         All estimates are Present Value
	One Time Fees
Item	SaaS	Internal
Hardware Purchase	0	28,000
Software cost	0	12,500
Setup Fees	4,500	3,500
Licensing fees	0	11,000
Installation administration	0	6,500
Procurement administration	0	1,500
Maintenance training of employees	0	2,400
Help Desk or other support functions	0	3,200
Multiple location coordination (systems and personnel)	0	1,800
TOTAL	4,500	70,400
	Ongoing (Monthly) Fees
Item	SaaS	Internal
Software upgrade cycles	0	330
Hardware upgrade cycles	0	850
Software administration	0	110
Hardware administration	0	80
Employee continuance issues	0	650
Dedicated or consumed employee salaries	0	2,850
Administration learning curves	0	225
Data storage cost	0	110
Maintenance training of employees	0	650
Management to coordinate and track support	0	325
Backup Administration	0	70
Monthly Fees (including all above items)	9,000	0
TOTAL	9,000	6,250

 

 

By these figures, it takes two full years before the ROI of doing an internal implementation matches the ROI from using SaaS.  (Based on the implementation cost difference and then the monthly difference.)  And, as is commonplace with technology, the servers will most likely have to be updated or upgraded or replaced in the meantime, numerous patches will occur and other variables that come with the passage of time will increase the costs of the internal method.  Patches and server updates are costs that are borne by the SaaS provider during the contracted time period.

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